Question 1

Existing sufficient taxable temporary differences,which will result in taxable income,is one piece of evidence to support a more likely than not criteria.

Accepted Answer

A) True 
 B)False  True

Question 2

VB Corporation incurred a tax loss of $86,000.Based on a tax rate of 45% what is the potential tax benefit?

Accepted Answer

A)  $86,000 
B)  $38,700 
C)  $0 
D)  cannot be determined 
A)  $86,000 
B)  $38,700 
C)  $0 
D)  cannot be determined B

Question 3

JR Ltd.provided you with the following information:   There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that tax losses are carried back as far as possible (sequentially)?

Accepted Answer

A)  $32,000 
B)  $176,500 
C)  $196,000 
D)  $80,000 
A)  $32,000 
B)  $176,500 
C)  $196,000 
D)  $80,000 B

Question 4

Describe the difference between a tax loss and a tax benefit.

Accepted Answer

A tax loss is the final number

Question 5

JMR's taxable income for the first five years was as follows:   Calculate the tax recovery in 20x15.

Accepted Answer

The answer of JMR's taxable income for the first five...

Question 6

The use of a valuation allowance account is mandatory under IFRS.

Accepted Answer

A) True 
 B)False

Question 7

Companies normally apply tax loss carry backs sequentially.

Accepted Answer

A) True 
 B)False

Question 8

Under income tax laws and regulations a corporation that sustains a net operating loss for the current year may elect to carry back and/or carry forward the loss for income tax purposes.

Accepted Answer

A) True 
 B)False

Question 9

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

Accepted Answer

A)  CCA is an optional deduction and is not lost if not used. 
B)  Minimizing CCA can create taxable income so that losses may be used. 
C)  CCA may be eliminated in the carry forward years. 
D)  Returns may be amended for the previous twenty years. 
A)  CCA is an optional deduction and is not lost if not used. 
B)  Minimizing CCA can create taxable income so that losses may be used. 
C)  CCA may be eliminated in the carry forward years. 
D)  Returns may be amended for the previous twenty years.

Question 10

Under current law,at the end of the year of loss or anytime during the next 15 years,a company may select to either carry back or carry forward-only the loss.

Accepted Answer

A) True 
 B)False

Question 11

The following data represents the complete taxable income history for a firm:   What is the tax liability for 2016?

Accepted Answer

A)  $9,000 
B)  $5,400 
C)  $8,000 
D)  $6,000 
A)  $9,000 
B)  $5,400 
C)  $8,000 
D)  $6,000

Question 12

Geisler Corp.provided you with the following information for the year ending December 31,2017: Net Income before taxes: $150,000
Depreciation (included in above)$90,000
CCA$250,000
The net book value of the capital assets was $1,100,000,and their UCC was $900,000 on January 1,2017.
A temporary difference of $200,000 is reflected in an accumulated deferred income tax liability (DTL)balance of $90,000 at January 1,2017.
There were no permanent differences.
Taxable income in the three-year carry back period was $400,000.Tax losses are carried back as far as allowable by law.
A tax rate of 45% applies to the current and previous years.
Geisler's 2017 journal entry to record its Deferred Tax amounts would include:

Accepted Answer

A)  a Deferred tax - benefit amount of $62,000. 
B)  a Deferred tax - expense amount of $62,000. 
C)  a Deferred tax - benefit amount of $72,000. 
D)  a Deferred tax - expense amount of $72,000. 
A)  a Deferred tax - benefit amount of $62,000. 
B)  a Deferred tax - expense amount of $62,000. 
C)  a Deferred tax - benefit amount of $72,000. 
D)  a Deferred tax - expense amount of $72,000.

Question 13

A tax benefit represents:

Accepted Answer

A)  the final number of the taxable loss on the tax return. 
B)  the amount of refund to be received in the year. 
C)  assistance from the government. 
D)  the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes. 
A)  the final number of the taxable loss on the tax return. 
B)  the amount of refund to be received in the year. 
C)  assistance from the government. 
D)  the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes.

Question 14

The following information pertains to ABC Inc.:   Assume that ABC Inc.meets the more likely than not criteria for tax loss carry forward recognition.The tax rate for 2015 and beyond is expected to be 20%,and this rate was not known when the 2014 tax return was filed.This information would result in:

Accepted Answer

A)  a Deferred Tax Asset - Carry forward in the amount of $108,000. 
B)  a Deferred Tax Asset - Carry forward in the amount of $135,000. 
C)  a Deferred Tax Asset - Carry forward in the amount of $47,500. 
D)  a Deferred Tax Asset - Carry forward in the amount of $38,000. 
A)  a Deferred Tax Asset - Carry forward in the amount of $108,000. 
B)  a Deferred Tax Asset - Carry forward in the amount of $135,000. 
C)  a Deferred Tax Asset - Carry forward in the amount of $47,500. 
D)  a Deferred Tax Asset - Carry forward in the amount of $38,000.

Question 15

The following information for KAR Corporation is available:   KAR carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

Accepted Answer

A)  $82,000. 
B)  $77,000. 
C)  $75,850. 
D)  $43,750. 
A)  $82,000. 
B)  $77,000. 
C)  $75,850. 
D)  $43,750.

Question 16

Which of the following statements with respect to the required disclosures relating to tax loss carry forwards and carry backs is/are correct?

Accepted Answer

A)  Current tax benefit from tax loss carry backs and carry forwards need not be segregated between continuing operations, discontinued operations. 
B)  There should be disclosure of the amount of unrecognized tax losses. 
C)  Disclosure of the expiry date of unrecognized tax losses. 
D)  All of these statements are correct. 
A)  Current tax benefit from tax loss carry backs and carry forwards need not be segregated between continuing operations, discontinued operations. 
B)  There should be disclosure of the amount of unrecognized tax losses. 
C)  Disclosure of the expiry date of unrecognized tax losses. 
D)  All of these statements are correct.

Question 17

How does the existence of a loss in the year impact the accounting of temporary differences?

Accepted Answer

Tax losses do not impact the a

Question 18

KAR's taxable income for the first five years was as follows:   Calculate the tax recovery in 20x15.

Accepted Answer

The answer of KAR's taxable income for the first five...

Question 19

A company will show the same income tax expense/benefit regardless of whether or not a valuation allowance account is used.

Accepted Answer

A) True 
 B)False

Question 20

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

Accepted Answer

A)  CCA not claimed in one year is only partially lost for deferred years. 
B)  Minimizing CCA can create taxable income so that losses may be used. 
C)  CCA may be eliminated in the carry forward years. 
D)  Returns may be amended for the previous three years. 
A)  CCA not claimed in one year is only partially lost for deferred years. 
B)  Minimizing CCA can create taxable income so that losses may be used. 
C)  CCA may be eliminated in the carry forward years. 
D)  Returns may be amended for the previous three years.

Existing sufficient taxable temporary differences,which will result in taxable income,is one piece of evidence to support a more likely than not criteria.

VB Corporation incurred a tax loss of $86,000.Based on a tax rate of 45% what is the potential tax benefit?

JR Ltd.provided you with the following information: There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that tax losses are carried back as far as possible (sequentially)?

Describe the difference between a tax loss and a tax benefit.

JMR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

The use of a valuation allowance account is mandatory under IFRS.

Companies normally apply tax loss carry backs sequentially.

Under income tax laws and regulations a corporation that sustains a net operating loss for the current year may elect to carry back and/or carry forward the loss for income tax purposes.

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

Under current law,at the end of the year of loss or anytime during the next 15 years,a company may select to either carry back or carry forward-only the loss.

The following data represents the complete taxable income history for a firm: What is the tax liability for 2016?

A tax benefit represents:

The following information pertains to ABC Inc.: Assume that ABC Inc.meets the more likely than not criteria for tax loss carry forward recognition.The tax rate for 2015 and beyond is expected to be 20%,and this rate was not known when the 2014 tax return was filed.This information would result in:

The following information for KAR Corporation is available: KAR carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

Which of the following statements with respect to the required disclosures relating to tax loss carry forwards and carry backs is/are correct?

How does the existence of a loss in the year impact the accounting of temporary differences?

KAR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

A company will show the same income tax expense/benefit regardless of whether or not a valuation allowance account is used.

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

Exam 6: Revenue Recognition

Existing sufficient taxable temporary differences,which will result in taxable income,is one piece of evidence to support a more likely than not criteria.

VB Corporation incurred a tax loss of $86,000.Based on a tax rate of 45% what is the potential tax benefit?

JR Ltd.provided you with the following information: There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that tax losses are carried back as far as possible (sequentially)?

Describe the difference between a tax loss and a tax benefit.

JMR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

The use of a valuation allowance account is mandatory under IFRS.

Companies normally apply tax loss carry backs sequentially.

Under income tax laws and regulations a corporation that sustains a net operating loss for the current year may elect to carry back and/or carry forward the loss for income tax purposes.

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

Under current law,at the end of the year of loss or anytime during the next 15 years,a company may select to either carry back or carry forward-only the loss.

The following data represents the complete taxable income history for a firm: What is the tax liability for 2016?

A tax benefit represents:

The following information pertains to ABC Inc.: Assume that ABC Inc.meets the more likely than not criteria for tax loss carry forward recognition.The tax rate for 2015 and beyond is expected to be 20%,and this rate was not known when the 2014 tax return was filed.This information would result in:

The following information for KAR Corporation is available: KAR carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

Which of the following statements with respect to the required disclosures relating to tax loss carry forwards and carry backs is/are correct?

How does the existence of a loss in the year impact the accounting of temporary differences?

KAR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

A company will show the same income tax expense/benefit regardless of whether or not a valuation allowance account is used.

Reducing CCA is one tax strategy that a company may employ.All of the following are true except:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters